According to newspaper reports, the Senate’s Standing Committee on Finance and Revenue has approved a draft bill to regulate the affairs of the security market in the country in a transparent manner. The Securities Bill 2015 will authorise the Securities and Exchange Commission of Pakistan to stop any malpractices in the securities market.The Senate Committee also discussed the Anti-Money Laundering (Amendment) Bill 2014, seeking recommendations from the committee members on the matters. According to SECP Chairman ZafarHijazi, the existing Securities and Exchange Ordinance was adopted in 1969 and has become obsolete. He says that there is a need to remove shortcomings in the law by replacing it with a new one to meet the international standards. He told the committee that there were no provisions for duties of the securities exchange, system audit of stock exchanges, power of intervention of the commission to protect investors’ interests and regulation of clearing houses in the existing ordinance. Hijazi also observed that there are several sensitive cases in the security market, but the SECP did not act due to absence of legal power. It is the duty of the SCEP as the apex regulator to ensure fair and transparent market and protect investors’ interest.
It is hoped that the new law will consolidate the SCEP to regulate the securities industry and will protect the investors, especially those who play on small scale. However, it is up to the committee to adopt the bill or reject it. The Karachi Stock Exchange dominates the Lahore and Islamabad stock exchanges and it the responsibility of the SCEP to keep a balance of importance and should not let down the investors of the LSE and ISE.
It is unfortunate that the bill had been pending before parliament for the last five years and Senator TalhaMahmoodcorrectly pointed this at the meeting. The bill needs to be passed now and the SECP should take measures to secure the interests of the investors.The committee has directed the SECP to take action against those registered companies which were violating the rules and regulations and report back to the committee in two weeks. The committee praised the SECPfor its efforts in drafting the bill in line with international practices.
The stock market is the barometer of the economy and the government should ensure transparency in the trade of scripts.
